The job benefits of expanding Wi-Fi

A number of reports have estimated the economic benefits of broadband services, such as wireline and licensed wireless services, and their contribution to consumer welfare and creation of the jobs in the U.S. economy. That much is clear. However, a recent study shows that even unlicensed spectrum produces sizable benefits. The takeaway – policymakers and regulators need to speed as much licensed and unlicensed spectrum to the market, and do it as quickly as possible. 

Consumers have become deeply reliant on wireless broadband services for work, e-commerce, applications, entertainment and news, and communications. Used by more than 336 million U.S. wireless subscriber connections, wireless data traffic has more than doubled during 2013, reaching an incredible 3.2 trillion megabytes. 

{mosads}However, the problem with this achievement is that wireless service demand is outpacing the availability of spectrum. The Council of Economic advisors has predicted that U.S. wireless data traffic would increase twenty times over the next five years and the FCC has estimated that 275 megahertz of new spectrum would be needed by year’s end. As broadband wireless networks approach capacity, experts have coined the term spectrum crunch to warn of increasing risks from congestion, and slower and poorer quality on wireless networks. 

Wi-Fi service is reaching its limits too. These services have become essential in allowing mobile users to access hotspots in a myriad of locations, including airports, hotels, offices, coffee shops, community centers, libraries and other public locations, while using laptops, tablets, smartphones, and other Wi-Fi enabled equipment. Wi-Fi services also allow users to offload wireless traffic thereby sparing consumers data usage fees on their wireless service plans. The popularity of Wi-Fi services has led to more and more congestion. 

With Wi-Fi service traffic expected to surpass wireline traffic in less than four years, there is an urgency to get additional spectrum onboard. Moreover, Wi-Fi traffic alone accounts for more than twice the traffic carried by wireless service providers. Even as the FCC and Congress take steps to get more spectrum, more needs to be done.

The solution is to get as much spectrum online devoted to wireless broadband services – licensed and unlicensed – by any reasonable means possible. This will require finding untapped spectrum and improving the efficiency of assigned spectrum.

One FCC rulemaking proposes the latter solution. 

After taking public comments, the FCC has proposed allowing one satellite provider, Globalstar, to use its frequency for Wi-Fi services in markets where it has excess capacity, primarily in more urbanize areas. This provides a unique opportunity for more fully utilizing this bandwidth for terrestrial broadband services in more densely-settled areas.

If adopted, the FCC’s proposal would increase 2.4 GHz Wi-Fi capacity in the U.S. by one-third (22 MHz) and allow the satellite operator to deploy network access equipment, thereby permitting more efficient use of the band, as well as alleviating Wi-Fi congestion. The FCC proposal would also permit the deployment of 20,000 access points to schools, colleges and hospitals at no cost, as well as providing free satellite service to customers in federally declared disaster areas. While newly purposed spectrum normally takes years to bring into use, the FCC proposal would use 2.4 GHz spectrum that is already accessible within existing Wi-Fi chipsets, which means that consumers could potentially use and benefit from this Wi-Fi spectrum soon after the proposed rules are effective.

A recent analysis of the FCC proposal finds that adding 22 MHz to support Wi-Fi would provide sizable economic benefits for consumers – generating $11 billion in GDP per year and creating nearly 90,000 jobs – all while alleviating congestion for broadband users, as well as continuing to maintain satellite services. 

Unlicensed Wi-Fi services, like licensed wireless broadband services, provide tremendous benefits to the public, and the FCC proposal to efficiently utilize this spectrum appears to have substantial upside. The FCC proposal provides a positive step for relieving wireless broadband spectrum congestion, but more work is still needed.  Every effort should be made to bring additional licensed and unlicensed broadband spectrum onboard for the benefit of consumers and the economy as quickly as possible.

Pociask is president of the American Consumer Institute Center for Citizen Research, a nonprofit educational and research organization.  For more information, visit www.theamericanconsumer.org.